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Business unit analysis
Business units
For management purposes, the Group is currently organised into six operating divisions. These divisions are
the basis on which the Group reports its primary business unit information.
Principal activities are as follows:
A. Network, which provides an electrical distribution system for the conveyance of electricity from the
national grid and generators to the network’s customers’ supply points.
B. Revenue collection, which provides revenue collection and account enquiry services for customers of
the network.
C. Meters and relays, which owns and supplies meter and relay equipment for both customers of this
network and on other networks, within New Zealand.
D. Contracting, which provides electrical maintenance and electrical asset construction services to
customers and is an internal service provider for electrical work required by the network.
E. Generation, which involves the investigation, design, construction and management of small
hydro-electricity schemes throughout the North Island.
F. Corporate services, which provides managerial support for the other segments listed above.
Business unit information about these businesses follows on the next pages.
Pricing for intercompany transactions is based on a commercial arms length basis, with reference to the cost of
using external service providers.
Continuing operations
The following business unit analysis presents net results in some areas, i.e. some revenue is netted off
against expenses where revenue is passed through from another internal business unit and will therefore not
necessarily be directly comparable to the revenue and expenses on the Statements of Comprehensive Income.
A. Network
Group
Parent
2012
2011
2012
2011
Note
$’000
$’000
$’000
$’000
Income
32,226
31,516
32,230
31,516
Less transmission charges
5,230
5,356
5,230
5,356
Gross profit
26,996
26,160
27,000
26,160
Expenditure
Revenue collection (internal)
648
648
648
648
System costs (external)
323
546
323
546
System costs (internal)
3,709
2,996
3,709
2,996
Customer liaison
980
678
980
678
Asset management
1,303
1,157
1,303
1,157
Insurance
94
62
94
62
Impairment of accounts receivable
135
-
135
-
Depreciation and amortisation
6,408
6,174
6,408
6,174
Total expenditure
13,600
12,261
13,600
12,261
Earnings before interest and tax
13,396
13,899
13,400
13,899
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